Social & Domestic Issues

Unintended Consequences

Unfortunately, President Obama does not understand the basic laws of physics.  Newton’s third law of motion states that for every action there’s an equal and opposite reaction.  Nor does he understand the basic principles of economics including the law of unintended consequences and creating a “Moral Hazard”.  A moral hazard is created when a person behaves differently than he would have if he had to bear the risks of his behavior.

 Every time Obama attempts to repair a problem by government intervention, he creates a more serious problem.  An example of the law of unintended consequences is the President’s attempt to solve the financial crises by increasing the regulation of the American financial system. 

These attempts overtime “to fix and regulate” the financial markets have resulted in the loss of U.S dominance in the financial sector.  The most recent egregious example of this loss is the potential German acquisition of the iconic NY Stock exchange. 

Another example of the law of unintended consequences includes the stimulus spending programs that fail to create additional jobs but result in the ballooning of our national debt.  The stimulus spending took money from the efficiently run private sector in the form of higher taxes and reduced availability of debt and spent it in the inefficient public sector.  Jobs created by public sector spending merely displaced jobs lost by forgone private sector spending.  There are too many moving parts to the American economy for one individual, even a very smart one, to consistently predict the outcome of government intervention in the economy.

The President has created a number of moral hazards by trying to bail out Americans whose risky behavior got them into trouble.  An example of the moral hazard being created in Washington is the attempt to relieve monthly mortgage payments of families in economic distress whose mortgages are under water.  As a result of this program, taxpayers who lived modestly, saved and did not over-extend themselves with excessive mortgage debt are being asked to subsidize their profligate neighbors who bought bigger houses than they could afford.

No discussion about unintended consequences can fail to mention the Health Care bill. The President and the democrats insisted that the bill, which they admitted to not actually reading, decrease health insurance rates, providing affordable (or even “free”) care for everyone. When the Congressional Budget Office (CBO) said it would make it more expensive, they told the American people that the CBO was wrong and then insisted they check again. Magically, the CBO took another look and declared they were wrong and it the federal government would make money if it were to suddenly take over a third of the economy. After the bill passed, suddenly major corporations were having saying they would have to drop they’re health benefits unless the government gave them a waiver. Health insurance companies announced that rates would be skyrocketing due to mandates in the new law. And lastly, the CBO came back and stated the revised findings were wrong and the ObamaCare would cost $1 trillion over the next decade. Does that sound like a fiscally responsible bill when our country is $14 trillion in debt?

The most egregious moral hazard has been created in the financial and business sector where companies and banks that are “too big to fail” have been bailed out with taxpayer money.  These institutions include GM, Chrysler, Citibank, Fannie Mae and Freddie Mac.  Institutions that paid fat bonuses to executives and outrageous benefits to union workers were rescued by taxpayer money when they should have gone bankrupt.  With an institution that is “too big to fail”, it is “heads, I win” with risky behavior; and “tails”, the taxpayer looses when risky behavior results in financial losses.

Of course, the President isn’t the first to be struck with this malady, but it seems to affect politicians more than any other group. Part of the reason is that they are always beholden to their base and the interest groups that financially support them. This causes them to constantly overlook the ways policy harms the whole of society in favor of helping the small group. Then there is the fact that politicians regularly get upset when the Congressional Budget Office and independent commissions call them on the detrimental consequences of the latest policy. The politicians then respond in one of two ways- they either tell the CBO/commissions that the findings are wrong and to come back with another answer more suited to that politician’s sensibilities, or they commit fraud and send inaccurate numbers (while hiding additional funding in other bills) in order to produce a more… “pleasing” conclusion.

Is it too much to ask our President to consider all the ramifications before shoving another ill-advised policy down the throats of the American people? We’ve seen time and time again that Obama is slow to come to any conclusion or policy decision like in the Afghanistan surge and addressing both the crisis in Egypt and Libya. So why not take the time to examine all the outcomes first? Then have an honest discussion with the American public about the pros AND cons of a decision. Not only will it force the President to deal with unintended consequences, but it would also elevate the public discourse by creating a more informed electorate.

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  • deeme

    I just wish I thought the consequences were unintended..

  • 1LonesomeDove1

    Oh, don’t stop at dishonest, ed. Go ahead and scream IDIOT!!!!!!!! at Williams like you do everyone you disagree with.

    Besides, you don’t care about GM. You only care about running around this site doing damage control for your O’Savior.

  • 1LonesomeDove1

    Under Bush?????

    Once again, Congress decides money matters, not the president…………any president!

  • Ed_USA

    Who proposed TARP, moron?

  • 1LonesomeDove1

    Who had the final say on passing it, moron?

  • Ed_USA

    Bush did, jackass. If the POTUS doesn’t sign then it’s called a “veto”. Only if a veto is overridden is there a final say after the POTUS. Was TARP passed over a veto? No? Well then, I guess Bush had the final say, didn’t he, moron.I swear, you are the stupidest being on the planet.

  • Ed_USA

    Where do you get this idea? The Constitution certainly doesn’t say so. It says “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law”. You seem to be ignorant of this fact, but all three branches have a role in the creation of laws. Congress has to pass them in both houses. The POTUS has to sign or veto them. Congress can override a veto. The courts can nullify a law on constitutional grounds. Every branch has a role in every law, including “money matters”.

    The Constitution also says “All bills for raising Revenue shall originate in the House of Representatives”. The bills originate there, but that’s not the entire process. The Senate must also pass each bill and the POTUS must sign it or have his veto overridden. The courts can, of course, nullify any law, even one for raising revenue that originated in the HR.

    In practice, the origination in the HR is a quaint fiction. The TARP bill was originally proposed by Hank Paulson’s Treasury Dept. The HR put the proposal into bill form and “originated” it. This is so well documented that even a delusional clown like you is likely to concede the point.

    You have some strange delusions about the gov’t that you don’t seem to be able to overcome. You need help.

  • 1LonesomeDove1

    ed, USSR….please! How many times does it have to be explained to you…….son?
    Bottom line, the purse strings of the nation are the sole responsibility of Congress. You can babble all the “bush did it’s” you want, but it won’t change that.

    Bush was in for 8 years, and you can never change that either, so either get over your “Bush did it” obsession, or get his picture and some darts and relieve your frustrations best you can.

    I’m not obsessed with your O’Savior, because…..God is my King, and He doesn’t run for reelection, but you seem to be obsessed with both these men.

    It’s YOU who needs help……..you still need to grow up…….and perhaps you will someday outgrow your childish reliance on these name calling tantrums of yours.

    Hope you make it!

  • 1LonesomeDove1

    No he didn’t stupid. He can propose anything he wants, but Congress has to vote on it. Did they reject it? No!

    Bush wasn’t like the present POTUS, and just shut out part of Congress to do whatever he wanted without allowing them to read, oh say….a health care bill or something, and (in the process) virtually thumb his nose at those who voted for those Congressmen!

    Once AGAIN! Congress controls the money….period! Do you not understand this yet?

    Are you really this retarded, or do you just have to argue because you have a bowel disorder of some kind?

  • Ed_USA

    “the purse strings of the nation are the sole responsibility of Congress”Show me in the Constitution where it says that. Show me ANY difference between revenue bills and other bills apart from the stipulation that the revenue bills must “originate in the House of Representatives”. For once in your life, try put up some facts to back up your nonsense. Just try. Of course you’ll fail, because I’ve already put the relevant parts of the constitution and real-world facts on the table. But give it your best shot, jackass. Show us all in precisely what way Congress has any more say in revenue than in any other law. Show us what you’ve got, jackass.

  • Ed_USA

    And once again to you, moron, show where it says that. Show us where it says that the POTUS cannot stop a revenue bill by a veto. Show us where the POTUS does not propose the federal budget before Congress gets to work on it. Show us where the Bush White House was not the first to propose and last to approve the TARP program. Again, you have this bonehead mantra of “Congress controls the money, Congress controls the money” that you keep bleating, but it’s not true. Congress can prevent spending, but so can the POTUS and the courts. None of the three can approve spending without the consent of the others. The POTUS even has a means, the “pocket veto”, to block Congress in a way that it cannot override. GW Bush actually used the pocket veto to block a spending bill, the Defense Authorization for 2008. Congress was forced to make changes to that bill to satisfy Bush and get his signature.You should try to learn something about how our gov’t works. You should also STFU while you do it. Your nonsense just wastes our time.

  • KayK2

    The only time Obama wants to talk things over is when he can’t ram something through congress. He doesn’t care what everyone thinks. I’m way past the point when I wondered if it was lack of foresight that was causing him to make so many economic blunders. He knows exactly what he is doing and that would be weakening us into irrelevancy. I just wonder who is pulling his strings.

  • DanB_Tiffin

    Enabling irresponsible people to avoid the just consequences of their irresponsible behavior is in the essence of liberalism.

  • daibutsu

    The imposter-in-chief has brought upon us yet another miscreant; Eric Holder. The consequences of “moral hazard” even extend to the DOJ: check this out..

    http://abc.daytonsnewssource.com/shared/newsroom/top_stories/videos/wkef_vid_6103.shtml

  • 1LonesomeDove1

    No. Under the Constitution, congress controls the purse strings of the nation……….not the president………any president.

  • 1LonesomeDove1

    “Show us where it says that the POTUS cannot stop a revenue bill by a veto.”

    Easy. Congress can override that veto, and you’re the continual idiot.

    As for the reast of your hysterical rant, I never made any of those arguments. Can you stick with the point just for once?

    And the courts? Do you know how involved that would become……..to drag the American people through yet another quagmire? Bush wasn’t a whiny democrat who runs to the courts every time they rightfully lose an election.

    Vetoes and “pocket” vetoes all depend upon who did what first, and congress could also have employed the courts to stop it if they wanted too, and we all know dems don’t hesitate to use the courts when they throw tantrums like you do.

    And stop yelling at people to shut up. You’re a guest here; albeit a rude childish one, and you seem to be unaware that this is not the Huffingglue compost, bowelmove.stink, or the dailykosenostra.

    Stop pooping your pants and act like a man for a change.
    _____________________________________

    Disqus is not cooperating again, so I will add this here….

    In spite of you “panic” to always be right, it IS true.

    The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

    To borrow money on the credit of the United States;

    To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
    http://www.usconstitution.net/const.html

    “….the Constitution also enshrined these overlapping responsibilities. The executive negotiates treaties; the legislature gives them binding power through ratification. The executive appoints ambassadors; the legislature blesses their appointment. The President is commander-in-chief of the military; the Congress controls the purse strings and has the exclusive power to declare war.”
    http://armsandinfluence.typepad.com/armsandinfluence/declarations_of_war/

    As long as the private bankers that make up the Federal Reserve Board have control over our nation’s money, Congress’ control of the purse-strings will not have the benefits the country’s Founders intended.
    http://www.citizensforaconstitutionalrepublic.com/Wallace_Federal_Reserve_Board.html

    The President has the ability to veto if that plan is not in conjunction with a bill that is vital to America, (the veto will be discussed in a subsequent article). In actuality the growth or failure of The United States economy falls mostly on the actions or lack thereof by the Congress since they control the purse strings through legislation.
    http://1787-1.blogspot.com/

    I have no doubt that this will NOT be enough to satisfy your incessant rant on this point, you arrogant little garden slug…….but go ahead and claim that these sources are of no use to you, for that would only put them in the same category with the many quotes from our Founders which you also have no respect for should they stand in direct opposition to any ignorant argument you propose on this site……….by your own words.

  • 1LonesomeDove1

    Bunk on the bulk of your hysterical post, and as for the insults………I can play that game too.

    Lets see……………….so’s yer momma!

    How was that, Baby Huey?

  • 1LonesomeDove1

    “You should wise up, Williams.”

    What are you, ed, USSR….a racist? (A little liberal reasoning here. LOL)

    Maybe you should get your own column somewhere and be known by millions of Americans………………..but you CAN’T, and you’re NOT, huh?

    Instead, you’ve decided to come here to parasite (abuse) the privileges that Human Events gives you, and be an insignificant butt pimple.

  • notarightwingtool

    Didn’t Bush do the bailouts? And allow big business to run, unfettered by regulation, until it had all but driven the economy into the ground?

    I fear the author may be in the throes of early-onset Alzheimers disease.

  • Ed_USA

    Nowhere have you shown that Congress has any more power to make revenue related laws than they have regarding any other law. Much of what you’ve quoted is just wrong. For example. “The President has the ability to veto if that plan is not in conjunction with a bill that is vital to America”Show me where in the Constitution that the POTUS is restricted from the veto for things that are “vital”. Was the defense appropriation bill that Bush stopped with a pocket veto not vital? Also, take treaties. Yes, the POTUS proposes them, but we already know that the POTUS also proposes the federal budget. Congress is actually somewhat more crucial for treaties than for other laws, since 2/3 is required to ratify.But let’s humor you for a minute. Suppose that revenue and spending was done solely by Congress. Well, that would mean that there were never any Bush tax cuts, only Congress tax cuts. There were no Reagan tax cuts either, and no Reagan defense build-up. All of that was done by Congress. Reagan did nothing.Furthermore, since we know that laws are made in exactly the same way for revenue bills as for others, Congress is actually solely responsible for everything. There is no Obamacare, only Congress-care. Bush didn’t start the Iraq war, Congress did by authorizing it. In your theory, it simply does not matter who is president. Look at the powers of the president in the Constitution. They are very few. Unless he’s commanding the military in war, pardoning someone, or doing a recess apointment, he has no power. How plausible is that view of the world? How many people believe it? Sorry, fool, but the effective power of the president has grown over time because of the party system and the media. Congress ALWAYS focuses on the priorities of a new president, particularly in the first year.

  • Ed_USA

    It was what I expect from you. No reason, no facts, just BS.

  • daibutsu

    Drudge report has just linked this story…

  • 1LonesomeDove1

    You got what I got from YOU………….insults. Only in my case, I’m a man trying to give a BOY a taste of his own juvenile medicine.

    No surprise that you just throw another tantrum instead of learning from it.

  • 1LonesomeDove1

    Ya know? It doesn’t matter that you answered me with the answer I fully expected………..just more long winded denial of the truth I have once again shoved in your dishonest face.

    What? Did you think I was expecting YOU to admit you were wrong? About anything?

    That fact that you either refuse to, or can’t understand the evidence before your own face does not equal a failure on my part, but I guess you figure it’s better than having no answer at all…..even if it’s just more liberal obfuscatory babbling.

    No matter. There are INTELLIGENT people here who know and understand that I just made a complete idiot out of you….again.

  • Ed_USA

    “I just made a complete idiot out of you….again.”

    Um, right. You keep on believing that then, crackpot.

  • 1LonesomeDove1

    Thanks for your permission, crack pipe. Especially when you and I both know it’s true.

    LOL!!!!!!!!!!!!!!!!!!!!!

  • DanB_Tiffin

    Look up codependency. It is liberalism. Same sickness.

  • http://pulse.yahoo.com/_M5FLH5JI4ZXJM422NAD6M5SS7U wc fields

    look up ‘sucker’. it is ‘conservatives’ who are not millionaires.

    i guess if i want workplace safety rules, a safe pension, regulations on banks and mortgage lenders, environmental protections, the right to sue my employer, health care that doesn’t drop me when i need it, weekends and overtime for more than forty hours of work, and credit cards that don’t jack up my rate from 12% to 29% for no reason and with no warning, i’m a codependent liberal. so be it. better than have the terms of my life dictated by the koch brothers.

  • Empirical1

    First off, you fail in a big way by assuming I’m pro Bush because I agree with Mr. Armstrong’s great article on the dismal failure of Obama. Also it appears that my point was nearly if not completely lost on you. Secondly, I’ve read your post and it somewhat disjointedly mentions something about concern over mortgages. Huh, sounds like BDS to me (Bush derangement syndrome) I think it was the dems that started the whole Fannie mae, Freddie mac subprime fiasco. And last but not least, my post was about the article, or did you fail to even read it? Discuss the merits of my post with regards to the article which had to do with obama’s past two years. WC, I think you’re in over your head here. Try Huffpo.

  • DanB_Tiffin

    That’s right, you are little miss victim, sniveling your way through life, demanding that Mommy and Daddy fix everything for you.